Complainant

Respondent

Parties

Paul  Burke

Dungarvan Insulation Limited

Representatives

Tom Giles Kelly BL instructed by Joseph P. Gordon & Co

Neil Breheny, Sean Ormonde & Co Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00046670-001

13/10/2021

Complaint seeking adjudication by the Workplace Relations Commission under Section 14 of the Protection of Employees (Fixed-Term Work) Act, 2003

CA-00046671-001

13/10/2021

Complaint seeking adjudication by the Workplace Relations Commission under Section 12 of the Minimum Notice & Terms of Employment Act, 1973

CA-00046672-001

13/10/2021

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00046673-001

13/10/2021

The complainant was employed on an informal basis from 4th August 2020 and then under a formal 3-month contract from 2nd November 2020 which was extended up until he was dismissed on 20th August 2021. From 2nd November 2020, he was on a gross salary of €28,704. The formal contract was subject to renewal when agreed between the employee and company. There was no formal renewal of the contract although the complainant continued to work on the same terms and conditions up until he was dismissed on 20th August 2021. The complainant set out that prior to the formal contract of 2nd November 2020, he was employed on an informal basis from 4th August 2020.

The complainant claims he was unfairly dismissed, did not receive minimum notice and that there was a breach of the Protection of Employees (Fixed-Term Work) Act 2003. He further claims that there were unlawful deductions of sales commission and that he was not paid for his accrual of annual leave when his employment was terminated.

The respondent position is that he was summarily dismissed arising from a customer complaint and that he does not have the requisite 1-year service to pursue an unfair dismissals complaint. The respondent denies that there were unlawful deductions from his sales commission and contests the complainant is due payment for annual leave accrual.

The complainant representative outlined the basis of the claims. He submitted that evidence would be given by the complainant that he was working under an implied contract from 4th August 2020 and had the requisite 1-year service to qualify under the unfair dismissal’s legislation.

Summary of Complainant’s Evidence

Mr Burke gave evidence of his previous employment in sales which was in jeopardy due to Covid restrictions. He heard of an employment opportunity with the respondent, submitted a CV in July 2020 and then met with the Managing Director, Mr Power.

He gave evidence that he was receiving a Covid state support payment (PUP) and the arrangement was that this payment would be topped up by the respondent. He gave evidence that as he had no transport, he was given a company van and he was to accompany a sales representative to price jobs and learn about the company. He met the Sales Representative on six occasions and had one full day training with the Managing Director. He worked every day although he was dependent on getting calls from the office to price jobs and get sales. He referred to screen shots of 5th, 17th, & 21st August 2020 to demonstrate the dealings he had with the staff of the respondent. One screen shot contained details of the company account, an email quotation, and another was a ‘Copy of an order example’. He was forwarded a weekly work sheet from the office with his name on it and he would include details of the jobs and quotes given to customers. The first sheet he filled in was the week commencing 31st August 2020.

On 2nd November 2020, he accepted a formal position and as part of this contract he would be paid commission on sales. He understood that once he had customers signatures for work to be carried out that these jobs were all included for his sales commission payments. He became frustrated at delays with the payment of commission and recoupments made from his commission when jobs did not proceed. As there was uncertainty about supplies and jobs being completed during Covid, he expected to be informed of cancelled jobs and reductions in his commission payments.

In or around 20th August 2021, he received a phone call that his employment was to be terminated and that he was to return the company van by 11am that morning. He got 2 hours notification of the termination of his employment arising from a customer complaint and there was no procedure for his input to respond to the complaint.

In seeking employment following his dismissal, he gave evidence that he was pursuing a sales job up to October 2021 and that he suspects that this fell through due to an unsatisfactory reference from the respondent. He gave evidence that he applied for other jobs on 19th October 2021, 19th April 2022, 17th June 2022 and over the previous number of weeks. He was taking steps to obtain a hackney licence although this process was slow due to the regulations involved.

The complainant was cross examined on his admission of receiving PUP assistance at the time he was alleging that his employment had commenced with the respondent from August 2020.

He was questioned on why he did not seek payslips from August 2020. He was questioned on his previous employment and whether this had been formally ended.

He was questioned on his sales sheets from 31st August 2020 onwards which included duplications of sales by other company sales representatives. He was questioned on whether he was assigned a company van and from what date. He was questioned on the nature of the work he carried out.

In relation to mitigating his loss, he was questioned on his efforts to find other alternative employment. An advertisement for a hackney service displayed in a local shop was produced. The complainant admitted that this referred to him even though he had not obtained much hackney work.

Under re-examination, the complainant clarified that he received payment for hackney services over the last few months of up to €1,000, although there were ongoing costs in complying with regulations.

The complainant alleged the annual leave due to him was 17 days. The respondent contested this and stated that he had taken 13 days annual leave and denied that he was due any annual leave.

Closing on behalf of Complainant

The complainant’s representative outlined that there was sufficient evidence that an employment relationship existed with effect from August 2020.

The respondent had not contested that due process was not followed when the customer complaint was received. Separate to the dismissal claim, there was no notice of termination afforded to the complainant.

The complainant was owed moneys which were recouped by the company and the contract of 2nd November 2020 did not allow for these deductions.      

The respondent representative contested that the complainant had the requisite 1-year service to pursue the unfair dismissals complaint and denied that there were monies due to the complainant arising from sales commissions or annual leave. The respondent position is that the employment commenced on 2nd November 2020 when the formal 3-month contract commenced.

Summary of Mr Power’s Evidence

Mr Power, Managing Director, confirmed that the complainant commenced full-time employment in November 2020 and that prior to that, in August 2020, he had accompanied the complainant to some jobs. He did not pay the complainant although expenses were paid for lunch and travel. He outlined that the summer of 2020 was stop/start for construction and that he could not employ someone over this period due to the uncertainty arising from Covid.

He gave evidence that the complainant made substantial sales although some jobs did not proceed and could not be included in the calculations for commission.

He gave details of how he received a complaint from a customer in August 2021 and he considered the complainant’s behaviour to be inappropriate and damaging to the business. He rang the complainant and let him go there and then.

Under cross examination, Mr Power denied that he had employed the complainant from August 2020 and that he had supplied a company van. He was questioned on the sales sheets from 31st August 2020, and he denied that these were valid sheets. The cross examination was adjourned at this point at the request of the respondent as they were not copied on the sale sheets and needed to check whether they were valid. On the resumption of the 2nd day hearing, Mr Power confirmed that the complainant attended work an odd day and that his understanding was that he was already in alternative employment. Mr Power was then questioned on the complainant’s email communication of July 2020 seeking employment with an attached CV.

On receipt of the customer complaint, he confirmed that he decided to terminate the employment and there was no investigation or right of reply afforded to the complainant. He clarified that the company did have a grievance and disciplinary procedure which allowed for suspensions with pay. He also confirmed that no notice period was given prior to dismissal.

In relation to the 3-month formal contract from November 2020, he was questioned on the renewal of this and whether it was formally extended. He confirmed that it was just extended without any formalities.

Summary of Mr Kelly’s Evidence

Mr Kelly confirmed that he was a contracted sales representative for the respondent company and that he invoiced the respondent for his services. He gave evidence that he had met the complainant on a few occasions in August 2020 and the complainant sat in on sale appointments. This was to ensure the complainant understood the work and the company procedures on sales. These meetings were at the request of the Managing Director and both parties travelled separately to the appointments due to Covid. His understanding was that the complainant was part-time and was assessing his suitability for the job and that he had another job.

On examination of the sales sheets from 31st August 2020 onwards, he confirmed that some of the sales were duplications of his sales.

Under cross examination, Mr Kelly was questioned on whether it was true that the complainant was working elsewhere as he had submitted an email to the respondent in July 2020 seeking employment. Mr Kelly clarified that this is what the complainant had said to him. Mr Kelly was then questioned on the alleged duplications of the sales sheets. He confirmed that he was training the complainant under the direction of the Managing Director and that he was imparting knowledge of the business.

Summary of Ms Young’s Evidence

Ms Young’s works in administration and deals with the sales dockets and assists with the calculation of the sales commission figures. She gave evidence on the duplication of some entries in the sales sheets from 31st August 2020. She clarified that the value of sales would be discounted if the job was not undertaken or if there was a duplication. She outlined the different systems of commission payment for contractors and staff.

Under cross examination, she was questioned if a change took place on the calculation of sales commission to restrict payments only when the company recieved the deposit. She was unsure as to when this change came about and replied that she would always check commission on sales with the complainant prior to payment.

She clarified that before commissions were paid, she would copy the complainant to ensure that the figures were accurate and there were no errors.

 She was unaware of whether the complainant had a company van and from what period.

Closing on behalf of Respondent

The representative for the respondent questioned whether the complainant was involved in an illegal act as he gave evidence that he was receiving a top up to the PUP state payment for a period. He outlined that the respondent had denied making any payments to the complainant for August, September, and October 2020, other than expenses for travel and lunch.

As the complainant commenced employment on 2nd November 2020, he did not have the requisite employment service to pursue an unfair dismissal case.

On the payment of wages issue, the complainant could not have expected to be paid commission on jobs that were never carried out and if this was the case then the respondent and others could be out of business.

On redress, he stressed that the complainant was obliged to pursue employment and mitigate his loss by applying for positions each day and he had not demonstrated this. Although the complainant had said he was pursuing a hackney business, he did not declare any income for same until he was cross examined and revealed income of roughly €1,000 euro over recent months.              

CA-00046670-001 Unfair Dismissal Complaint

Jurisdiction

Section 2. 1 (a) of the Act states that it shall not apply to an employee who is dismissed, who at the date of dismissal, had less than one year’s continuous service with the employer who dismissed him.

I have examined the extensive submissions and evidence presented to assess the continuous service issue. It is common case that an employment relationship can exist as an implied contract without the formalities of a contract.

The complainant has given evidence of emails and activities with the respondent in the months of July/August 2020. These include an email seeking employment in July 2020 and other communications including sales sheets  from 31st August 2020. Screen shots of 17th August demonstrate engagements with the respondent on bank account details and a ‘Copy of an order example’. Site visits were confirmed in evidence by Mr Kelly and by the Managing Director although they viewed these as opportunities for the complainant to understand the nature of the job. It was confirmed in evidence that the site visits arose at the direction of the Managing Director.

There is conflicting evidence on whether the complainant was supplied with a company van at the beginning of August 2020. There is also conflicting evidence on whether payment was made to the complainant although it is accepted that he was paid expenses for lunches and travel. The complainant gave evidence that he worked every day whereas the respondent says he attended some site visits on occasions and was accompanied.

Although there is a fundamental conflict in evidence, I decide that the complainant has 1-year continuous service working with the respondent.

The reason for this decision is based on several factors:

·       Two witnesses, the Managing Director and Mr Kelly gave evidence that they arranged to meet the complainant on site or at customer appointments during the month of August 2020.

·       Although the respondent asserts that any work undertaken was a trial period for the benefit of the complainant, it is also clear that the respondent benefited from this work, despite the conflicting evidence on whether there was payment.

·       The email evidence of 17th August 2020 indicates an employment relationship.

·       The email quote for work of 21st August 2020 was within the one year look back if the one-week statutory notice period is factored in as the complainant did not agree to forgo this statutory entitlement.  

·       Even though the weekly sales sheets are from 31st August 2020 and outside the one year look back, it shows extensive work activity and that the complainant had emersed himself into the job on behalf of the respondent.

The above work activity indicates that there was mutuality of obligation between the complainant and respondent from August 2020. If the respondent was relying on this period as being training or probation, then Section 3 of the Act requires that this period be set out in writing. There was no written evidence presented by the respondent that this period was for training or probation.

The formal contract itself from November 2020 contains a clause that:

‘This contract is for three months from 2nd November and is subject to renewal as and when agreed by the employee and the company’.

Despite the renewal clause, there was no discussion or agreement reached and the contract rolled on as an implied contract. This indicates that the respondent was prone to a continuous employment relationship and mutuality of obligation without a formal contract being in place.

Having decided that I have jurisdiction to hear the complaint, I will now proceed to decide the case under the Act.

Unfair Dismissal

The respondent has confirmed in evidence that the complainant was dismissed ‘there and then’ and that there was no investigation or right of reply to the customer complaint. The Managing Director confirmed that there was a company grievance and disciplinary procedure which allowed for a paid suspension period. Despite the procedures being in place to deal with the customer complaint, the respondent did not follow their own procedures or any procedures. There were no previous disciplinary issues or misconduct by the complainant highlighted during the hearing, so the approach taken by the respondent was extreme. I find that a reasonable employer in the same circumstances would not have taken the approach of unilaterally dismission the employee with due process.  

I decide that due to the lack of fair procedures and due process afforded to the complainant, that he was unfairly dismissed.

Redress

As there is an obvious breakdown of trust between the parties, I find that compensation for financial loss is the appropriate remedy. Both parties made submissions and gave evidence on mitigation of loss. The complainant gave evidence that he sought another sales job over the three months after his dismissal and believes that he was not offered a contract as the prospective employer may have contacted the respondent. He gave evidence that he applied for other roles without success and has been in receipt of job seekers benefit. He has pursued setting up a hackney business and admitted under re-examination that he had received some income over recent months.

The respondent representative has pointed to the lack of documentation to demonstrate the complainant has taken steps to mitigate his loss and that insufficient job applications have been made over the extended period. He also submitted that the complainant was not forthcoming on his recent income through the hackney service.

Evidence was given by the complainant that he was receiving PUP payments over the period August/September/October 2020, and at the same time was in employment with the respondent. I therefore need to address this issue.

Arising from Covid, there were many employees out of work and the PUP support payment was described by the relevant government department as ‘The COVID-19 Pandemic Unemployment Payment (COVID-PUP) is available to employees and the self-employed who have lost their job on or after 13 March 2020 due to the COVID-19 pandemic.’  

There was a lot of confusion at this time as to whether those on PUP payments were required to seek alternative work or whether they could await the re-opening of their workplace when restrictions were lifted. Unfortunately, some businesses did not re-open and the complainant gave evidence of how he sought work from the respondent in July 2020.

As the PUP state support was a once off scheme to deal with the effects of Covid which affected thousands of workers who were either out of work or between jobs, I do not see the complainants attempt to seek work at this time as being particularly unusual. I am required under the Act to assess whether the complainant was in continuous employment for 1-year and I have decided that he was.

Having considered the above evidence, I decide that the appropriate remedy is €11,960 compensation to be paid by the respondent to the complainant which is the equivalent of 5-months pay.

CA-00046671-001- Protection of Employees (Fixed Term Work) Act 2003

In summary, this complaint under Section 8 of Act requires the employer when renewing a fixed term contract to provide the employee with reasons justifying the renewal and the failure to offer a contract of indefinite duration.

As the 3-month formal contract expired on 2nd February 2021 without reasons as to its renewal, the complainant has brought this complaint. As the complaint was made to the Workplace Relations Commission on 13th October 2021 and not within 6-months of the breach, I do not have jurisdiction to deal with this complaint.

I find this complaint not well founded.

CA-00046672-001- Minimum Notice and Terms of Employment Act 1973-2005

Section 4 (1) of the Act provides that an employer shall, in order to terminate the contract of employment of an employee who has been in continuous service for a period of thirteen weeks or more, give to the employee a minimum period of notice calculated in accordance with the provisions of subsection (2) of this section.

(2) The minimum notice to be given by an employer to terminate the contract of employment of his employee shall be-

(a) If the employee has been in continuous service of his employer for less than two years, one week…”

As evidence was provided that the complainant was dismissed without notice, I find that Section 4 of the Act has been contravened and decide the respondent pay compensation equivalent to one week’s pay to the complainant.

CA-00046673-001- Payment of Wages Act 1991

Section 5(1) of the Payment of Wages Act 1991 sets out the parameters according to which deductions may be made from an employee’s wages:

“(1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

(a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c) in the case of a deduction, the employee has given his prior consent in writing to it.”

It is clear from this section that, apart from statutory deductions of tax, PRSI and USC, or those permitted by contract, before any other deduction is made from an employee’s wages, they must provide their written consent.

Section 5(6) addresses the circumstances in which wages which are properly payable are not paid:

“(6) Where—

(a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or

(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee,

then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion.”

The complainant relies on the contract of 2nd November 2020 which sets out the monthly commission payments and does not provide for any reduction of commission payments to be made. The contract refers to ‘Sales’ and the complainant is relying on the definition of sales as being made once the customer signs off on works to be done regardless of whether the works are undertaken or not.

The respondent’s position is that commission is only required to be paid on ‘Sales’ that are carried out with a deposit paid.

I note the contract states that ‘Commission earned will be paid the first week of each month for the previous month.’  It is claimed by the complainant’s representative that there has been a change in the method of payment for sales commission with effect from April 2021 and that when sales fall through that deductions are then made retrospectively without any authority for deduction given by the employee. The complainant gave evidence that he was not informed when works did not proceed and therefore cannot track his sales commission payments.

Ms Young gave evidence that sales commission figures are forwarded to the complainant in advance so that any discrepancies can be resolved in terms of any duplications or jobs which may not proceed.

In reviewing the evidence, I am not satisfied that the complainant has made out a case that commission payments were improperly deducted by the respondent. The contract itself does not differentiate between ‘Sales’ and whether the ‘Sales are then carried out in terms of jobs completed’. It is a tenuous argument to rely on commission for sales which in effect do not turn out to be sales. Although there may have been a change in the method of paying commissions based on actual sales with the works completed, I do not find that the employer is making unlawful deductions as prescribed in the act or that the employer is breaching the contractual terms as set out.

On the accrual of annual leave, there is conflicting evidence on the amount of annual leave taken by the complainant prior to the dismissal. The complainant claimed that he was due 17 days holidays and the respondent accounted for 13 days holidays already taken. As the leave year runs from January to December as per the contract, I do not find that the complainant had accrued any additional annual leave above the 13 days.

I find that there has not been a contravention of the Payment of Wages Act on sales commission payments and accrual of annual leave.      

CA-00046670-001- Unfair Dismissals Acts, 1977 – 2015- I find that the complainant was unfairly dismissed and award the equivalent of five month’s pay totalling €11,960 to be paid by the respondent.

CA-00046671-001- Protection of Employees (Fixed Term Work) Act 2003- I decide that this complaint is not well founded.

CA-00046672-001- Minimum Notice and Terms of Employment Act 1973-2005- I find that there has been a contravention of the Act and decide the respondent pay compensation equivalent to one week’s pay to the complainant.

CA-00046673-001- Payment of Wages Act 1991- I find that there has not been a contravention of the Payment of Wages Act in relation to sales commission payments and accrual of annual leave.  

Jurisdiction, Unfair Dismissal, Payment of Wages